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March 09, 2011

Obama Administration Supports S. 23

On Tuesday, the Senate passed the America Invents Act (S. 23) by a 95-5 vote (see "Senate Passes S. 23"). While the provisions that made it into the bill were not entirely clear yesterday, a version of the legislation as passed was posted on the THOMAS website today. The bill moving to the House contains provisions on the following:

As we reported yesterday, a number of patent and industry organizations, including the American Intellectual Property Law Association (AIPLA), Innovation Alliance, Biotechnology Industry Organization (BIO), and Coalition for Patent Fairness, were quick to release statements regarding the Senate's passage of S. 23 (see "Reaction to Senate Passage of S. 23"). The Patent Office also issued a statement about the legislation, albeit prior to the Senate vote. In a short press release issued in anticipation of the Senate vote, USPTO Director David Kappos "urge[d] the Senate to pass this crucial legislation," which he said would "help to deliver a 21st century patent system that better equips the USPTO to move innovative ideas with sound patent protection to the marketplace." Not surprisingly, Director Kappos focused on provisions that would impact Office funding, citing an Federal Trade Commission (FTC) report recommending, in the Director's words, that "for our patent system to best serve America's innovators, it is essential that the USPTO have adequate funding to address the backlog of patent applications -- one of the key reforms this legislation would make possible."

Last week, the Director wrote on his blog that the patent system was in "immediate need of attention," and that S. 23 would "update[] our patent system by offering greater certainty about patent rights, lower fees for independent inventors and micro-entities and faster alternatives to expensive litigation," as well as "enable[] a financially stable USPTO that promotes growth for innovators in all industries and of all sizes." In his post, the Director cited the Statement of Administration Policy on S. 23 from the Office of Management and Budget (OMB), which notes that "[t]he Administration supports Senate passage of S. 23," stating that:

As a whole, this bill represents a fair, balanced, and necessary effort to improve patent quality, enable greater work sharing between the United States Patent and Trademark Office (USPTO) and other countries, improve service to patent applicants and the public at the USPTO, and offer productive alternatives to costly and complex litigation.

The Administration's statement continues:

By moving the United States to a first-to-file system, the bill simplifies the process of acquiring rights. This essential provision will reduce legal costs, improve fairness, and support U.S. innovators seeking to market their products and services in a global marketplace. Further, by providing authority for the USPTO to establish and adjust its fees to reflect changes in costs, demand, and workload, the bill would enhance productivity -- reducing delay in the patent application process -- and ensure full cost recovery at no taxpayer expense.

With respect to the Senate bill's first inventor to file provision, the Director writes that:

By moving the United States to a First-Inventor-to-File (FITF) system, the bill establishes greater speed and certainty about property rights in the innovation marketplace, while also leveling the playing field for anyone seeking to participate in global commerce. While I recognize some have concerns about this switch, the reality is that the current First-to-Invent system is fraught with peril. Under the current system, a host of objections can be raised in litigation that undermine a patentee’s rights. Such litigation is expensive and time consuming.

The patent reform debate now moves to the House. Based on the Administration's comments concerning S. 23, if the House passes legilsation resembling the Senate bill, the six-year trek to enact some form of patent legislation could be at an end.

Comments

Yeah he asked me the other day what I thought of it and I told him it looked good to me so my recommendation was to put his weight behind it. He was like "aight, sounds good, we'll get genes next time around". I said that sounded good and here we are.

Just because they call it “reform” doesn’t mean it is. Patent reform is a fraud on America. This bill will not do what they claim it will. What it will do is help large corporations maintain their monopolies and kill their small entity and startup competitors (which is exactly what they intended it to do) and with them the jobs they would have created. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” This bill is a wholesale slaughter of US jobs. America.

Who would have believed it -- patent reform has finally passed in one chamber. Given the momentum this issue has right now, I'd expect that some version of the bill will likely pass in the House soon, too. As usual, however, the devil will be in the details; though I can't imagine much opposition to the fee diversion and fee-setting authority provisions, the first-to-file and post-grant issues may prove somewhat thorny.http://www.aminn.org/patent-reform-act-2011-s23